Citi, OPIC and Bank Andara Support the Rapid Growth of the Microfinance Sector in Indonesia with $18.5 Million Term Loan Funding
October 2, 2012
(OPIC)
Citi Indonesia, the Overseas Private Investment
Corporation (OPIC) and Bank Andara announced
the closing of a USD 18.5 million term loan to
fund the growth and strategy of Bank Andara’s
Microfinance business, and to promote the
financial inclusion of micro entrepreneurs and
small businesses in Indonesia. This loan is
the second one from Citi and OPIC for the
microfinance sector in Indonesia, and is a part
of Citi’s and OPIC’s joint global initiative to
support microfinance lending in emerging
markets worldwide.
OPIC President and CEO Elizabeth Littlefield
said, “As a wholesaler to other microfinance
institutions, Bank Andara is a force multiplier
for low-income households and small
entrepreneurs in rural Indonesia. We believe
that Bank Andara’s innovative use of technology
is a powerful channel to provide financial
access to micro entrepreneurs and small
business in Indonesia that lack basic financial
services. In addition, by supporting
microfinance institutions in Indonesia with
treasury management services, Bank Andara will
help these institutions to better manage their
business.
“The successful deployment of capital, banking
services and technology will serve to support
the development of financial infrastructure of
Indonesia, a priority country for OPIC and the
Obama Administration. We are extremely pleased
to team with Citi and Bank Andara in such a
developmentally-rich initiative,” she added.
Ms. Littlefield noted that OPIC provides
capital to microfinance institutions through
investments in microfinance investment
vehicles, targeted credit facilities to
individual microfinance institutions, risk
sharing arrangements, and guaranties supporting
innovative industry efforts. OPIC has
committed over $650 million to microfinance
projects, which have supported 125 MFIs in 36
countries.
“Indonesia is a developing country that is
currently facing a rapid growth in its
microfinance sector which has a potential
opportunity to grow its economy even further as
we know that there are still millions of small
business that are lacking of access to banks,
financing or microfinance,” says Kunardy Lie,
Head of Global Banking Citi Indonesia. “This
loan shows the continuation and consistency of
our commitment to Indonesia economy. Through
Bank Andara, which focuses on rural financial
institutions, we are confident that it will
come to a progressive development that enables
small businesses in Indonesia to grow further,”
he added.
David Yong, President Director Bank Andara,
added ”This credit facility agreement proves
strong support and confidence from OPIC &
Citi Indonesia towards Bank Andara’s execution
of its mission of Financial Inclusion through a
Wholesale FI model exclusively. By positioning
itself as champion of micro finance
institutions in Indonesia Bank Andara
possesses a unique business model, which
provides greater reach to technology and
knowledge transfer, next to financial services.
We are increasingly seeking additional domestic
funding channels, including institutions,
foundations and high-net worth individuals. Our
transactional banking platform, AndaraLink, has
shown a healthy growth of new joiners and now
exceeds more than 300 micro-finance
institutions and growing. By end of June 2012,
we have already completed another credit
facility from a domestic banking institution
and also obtained additional capital from
shareholders. The Bank has demonstrated it
growth trajectory through total assets which
expected to be close to IDR 1 trillion by end
of July 2012. Virtually most of the funding
will be utilized to increase our lending
disbursements to micro finance institutions, in
line with our strategic focus. We have the
systems and tools in place to differentiate the
risk profiles of the various micro-finance
institutions and our portfolio is sufficiently
granular both in terms of geography and
clients. We believe Bank Andara’s unique
business & focus will strengthen us as the
trusted business partner of Indonesia’s micro
finance institutions”.
“While the microfinance sector in Indonesia is
one of the largest in the world, the World Bank
estimates that only 9 pct of adults in
Indonesia accessed a loan from a formal
institution last year. Moreover, as less than
50 percent of its population currently does not
have access to the financial system, Bank
Andara is uniquely focused on providing
microfinance institutions and rural banks with
access to funding and innovative products
technology and training, so that they can serve
greater numbers of clients and having grater
reach than traditional players. We are pleased
to be working with our partners OPIC and Bank
Andara to expand financial inclusion in
Indonesia,' said Bob Annibale, Citi’s Global
Director of Microfinance.”
Citi’s strong commitment to promote financial
inclusion through innovation, thought
leadership and building clients financial
capability is very well recognized. Citi was
awarded the top prize in the International
Award category at the Business in the
Community’s Awards for Excellence 2012 for
“Scaling Microfinance to Achieve Financial
Inclusion,” a case study of Citi’s $350 million
partnership with OPIC to develop new
distribution models to access
microentrepreneurs in developing markets.
About Citi
Citi, the leading global bank, has
approximately 200 million customer accounts and
does business in more than 160 countries and
jurisdictions. Citi provides consumers,
corporations, governments and institutions with
a broad range of financial products and
services, including consumer banking and
credit, corporate and investment banking,
securities brokerage, transaction services, and
wealth management.
About Citi Microfinance
Working across Citi’s businesses, product
groups and geographies, Citi Microfinance
serves more than 100 microfinance institutions
(MFIs), networks and investors as clients and
partners in over 40 countries with products and
services spanning the financial spectrum – from
financing, access to capital markets,
transaction services and hedging foreign
exchange risk, to credit, savings, remittances
and insurance products - to expand access to
financial services for the underserved. www.citi.com/citi/microfinance
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